US government bond yields and mortgage rates reached fresh seven-month highs on Monday as interest rate futures continued to discount a near-term rise in the Fed funds rate in the wake of Friday’s US employment report.
The yield on the two-year Treasury rose 12 basis points to 1.43 per cent, taking its rise over the past two sessions to nearly half a percentage point. The 10-year yield rose a further 5bp to 3.91 per cent. That narrowed the gap between the two maturities down to 248bp from last week’s record 281bp.
